Goodhart's Law: "When a measure becomes a target, it ceases to be a good measure."
YC is the new college degree. This attitude of "figuring our how to past the next test on the path to guaranteed success" is the opposite of entrepreneurial.
I would argue YC is very pragmatic about the criteria it uses to fund people. If this were an every-increasing spiral of BS to get into YC, then you'd be right.
Being plain spoken is basically the opposite of BS.
In the post I do note that this stuff is pretty handy for anyone explaining their business to anyone. You should be worried if it were only useful to YC interviewees.
I agree with this. The best companies and founders in our batch were those who had thoughtful, direct answers to questions.
Posts from VCs can be helpful to hear the kind of questions they'll ask and why they ask them (i.e. what they are worried about.) Answer directly and honestly.
YC has far more to lose by gaming activity than the gamers. I am sure YC is worried about creating an ecosystem where startups are focused on passing and not on building value. I am not sure what the solution is given how influential YC has become.
> Traction gets you in the door, the big future gets you the check
Interesting. Would you say this is just a more focused way of describing what Leo Polovets has been writing about on codingvc.com, or do you think there is a practical or philosophical difference in what YC looks for?
I think Leo nailed it with that post. I just had lunch with him actually and it's remarkable how similar our philosophies are. Not that surprising I guess, since he is also a seed investor who started as a hacker.
> What makes people get out the checkbook is how big you can become.
Drew said 1M. So, its not that necessary to over sell than what you believe, is it? Maybe now it is as YC has become a giant corp?
Where is the YC of 2007 which created more value per startup than current YC (maybe i am wrong about the value per startup part but it doesn't look like, also it makes sense for YC to care about overall value than per startup value to create more impact just like big companies.. maybe ripe for disruption in few years)
What I meant was Drew had applied with dropbox saying he would exit if someone paid 10M. But current YC seems to be to big for that kind of exit target.
> You've always got to put your best foot forward.
early stage startups can be very delusional about how big they can become on either side of the scale (drew quoting very less and some other startup quoting billion dollars). So, its not really up to the startup to predict how big they can become, it all depends on the interviewer. Nothing to do here for the startup i guess.
Just jotted my quick notes on what kept coming up with the half dozen or so early interviewees I met in advance of their interviews the past few days. It was surprising how the same things kept coming up over and over again, so that's what spurred this post.
I've been trying to answer emails from founders as much as possible, and have been taking a few meetings from cold emails. My schedule is booked out to December as a result, but I'm working through it.
How about advice for the YC application? I've read the sample (from Dropbox), but I've wanted to know more about successful applications. Is brevity important? Are screenshots and things allowed? How much concrete market data should be involved vs. big picture, theoretical speak?
I'd like to apply next year, but I'm concerned about a lack of usable demo/lackluster application. I've also seen people refer to YC as the "Ivy League" of VC funding, so I'm stressing about the details of each individual piece.
I previously blogged here about the general application process. You should definitely apply. YC is basically one of the few places where anyone in the world can apply and have a real fair shake at having their application be read and voted upon by smart YC alums and partners. Just as the SAT helped normalize access to higher education, the YC app process is as valuable and rare and serves a similar purpose to help great teams and startups rise.
Would it be alright if I emailed/messaged you some more questions I have about the process? I've never actually communicated with anyone to have ever been involved with it before.
I have a more general query about the whole YC interview process. Do people get 10 minutes and that is it or is this just a prescreen for a longer interview process? I do a bit of angel investing and I could not possibly decide to invest on the basis of a 10 minute interview.
They literally get 10 minutes, and partners have 5 minutes after to decide. Typical day is about 18 to 22 interviews back to back for 9 hours or so, with a break for lunch.
Well they must be a lot better than me at deciding which startups are good or not :)
I have spoken to many startups that seemed great after the first 15 minutes or so, but where I found out something critical a couple of hours in. I love talking to startups so for me it is fun rather than work to put in the time.
Thanks for another great post Garry. This is also perfectly relevant advice for talking about your business in general, not just for YC (investors, prospective hires, etc.).
If you're the type to get queasy nerves from public speaking, strangers, or presentations, best advice is a shot of Jameson 20 min before your interview.
This is actually excellent advice, and I'm not sure why it's being downvoted. It works well with public speaking and oral language proficiency tests as well.
Don't have two shots. There's a local maximum where you're disinihibited but still not impaired. Find that.
That trick used to work pretty well for me, but sometime around age 36† my liver crapped out and a single shot of whiskey will now make me break out in a sweat. Alcohol sweat + nervousness + public speaking isn't a great combination.
A single cigarette is about 80% as effective for me, without the bad side effect. At a normal rate of public speaking, I'm not sure how significant the health downside of those individual cigarettes might be compared to the alcohol.
† I have a brother a year younger than me who reports the same thing happened to him, so this might be genetic.
I usually tell teams to really focus on specific and direct stories that are helpful to answer the three things all people in a pitch care about: Team, idea, and traction.
Team is pretty straightforward. E.g. How do you know if you can do X? Well, my cofounder Amy did that for Google for 3 years.
Idea tends to revolve around validating the market, e.g. We know customers want it because they already pay $10K/mo to Oracle for the same thing.
Traction is the thing that usually really helps nervous folks because it doesn't change with delivery — your numbers are your numbers, so if you know how much revenue you're making and what the growth rate is the last 6 months, just say it.
All those are important from the perspective of having the answers to the questions themselves.
The point of the shot isn't to suddenly give you some last minute insights about the company you've been building. Hell if you book your ticket to SF without having that figured out you might as well not fly.
The point of the shot is to calm the nerves of those of us (present company not included haha) that aren't used to speaking or presenting. It's a daunting task, especially with something like YC acceptance on the line. If it helps you calm down enough to give the answers you've already prepared for then go for it.
Literally nobody doesn't have any traction. Literally nobody has no big possible future. Literally nobody doesn't understand something that other teams don't.
Like, literally 100.000% of startups that are at that interview stage pass every one of these tests with flying colors.
Don't believe me?
Let's go through what it would take to fail any of these metrics.
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1. Let's imagine that a startup doesn't "use plain language and is concrete".
Here's what it would have to sound like. I googled "computer science web service patent 2015" so that I could quote the obscure language some link uses. Here is something that isn't plain language, and isn't concrete:
A top link, to here https://www.google.com/patents/US8689181 , seems good. Let's go with it. Here is their language: "A process performed on a server includes configuring the server to enable script for a Web service to be defined dynamically, where the Web service includes an application program interface (API) for enabling access by, and interaction with, a computer program executing on a device other than the server. The process also includes compiling the script to produce machine-executable code for the Web service, receiving a call from the computer program to the Web service, executing the machine-executable code in response to the call to produce an output, and sending the output to the device." This is the top link by Google. Since it's a patent, it's not written in plain language. Since it's a patent, it's not concrete.
Question: CAN YOU IMAGINE ANY STARTUP WHO WAS INVITED TO A Y-COMBINATOR INTERVIEW SAYING THIS,
"So, first I'd like to talk about our product. We've basically invented a process to be performed on a server, that includes configuring the server to enable script ofr a Web service to be defined dynamically, where the Web service includes an application program interface (API) for enabling access by, and interaction with, a computer program executing on a device other than the server. The process also includes compiling the script to produce machine-executable code for the Web service, receiving a call from the computer program to the Web service, executing the machine-executable code in response to the call to produce an output, and sending the output to the Device. So that's what we do."
What percent of applicants will actually literally give a pitch like that? 0.0000%. A full 100.000% meet and exceed with flying colors the standard "use plain language, be concrete."
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2. ...Then zoom out, and be sure to show why that could be something much bigger
Is it possible that any team whatsoever fails to zoom out, or show why it could be bigger? Well, let's imagine it. Let's say that some team has come up with something without zooming out at all from it.
"We've invented a cable that can connect a new iPhone to a Macbook while also charging both. Competitors aren't making this yet, but we already are. We don't have any plans to make any other products now or in the future. We're really, really, passionate about and focused on this one. We live to make iPhone 7 to 2016 Macbook connection cable chargers, and that's it. We would never consider selling anything else, nor would our customers want us to."
Even without that last part, can you imagine any such company has even been invited to a YCombinator interview? Is it possible to imagine any company not zoooming out?
No. A full 100.000000% of all pitches by companies invited to interview for YCombinator exceed #2 with flying colors.
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3. Traction gets you in the door, the big future gets you the check
Let's imagine that there's no bright future. Let's imagine a team that says "We're at $2,000 sales today, but within 5 years I think we could easily make it to $18,000 or even $22,000 per month in sales. If we continue to dominate our niche, we can have a solid market of literally a thousand people, if we include the Asian market. This company will be worth $700,000 as long as we are able to keep executing."
It's ludicrous on its face. No company is there with that pitch. A full 100.0000% of companies have a big future ahead of them.
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4. Know your numbers
"What are your sales today?"
"No idea."
"Have you sold any?"
"Not sure."
"Well you're shipping."
"We're shipping, yes."
"Okay, how many?"
"Dont' know."
"Well, what is your cost to getting customers?"
"No idea."
"How many people visit your site?"
"Don't know"
"What is your growth rate?"
"Don't know."
"How many fingers am I holding up?"
"Sorry not sure."
it's ridiculous. Obviously 100.00000% of all companies know their numbers. This isn't even debatable.
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5. What do you understand that nobody else does?
again let's imagine that there isn't something. "Oh we don't know anything special. We're just doing the same thing everyone else is. Actually our business model is from a For Dummies textbook we found from 1997, we're just following it. One thing that we can say is that the book does appear to be out of print, so we do have that going for us."
Nope. Everyone understands their business better than their competition. Everyone has secret sauce. It's ridiculous to even suggest otherwise. We're not talking about florists where they happen to be the only florist in that town so far, which is why they opened it there.
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Conclusion
So these tips are absolutely, completely useless in every single way and will NEVER get you an investment.
Here is how you ACTUALLY demonstrably get an investment. Ignore all of the above and wow them with a story.
That's it. That's how checks demonstrably, actually get written.
I'm not opposed to the fact that this isn't widely advertised, but to waste the writer's time writing things that aren't true, and to mislead people into wasting their time following it, is pretty misleading.
I'm here to tell you it's bullshit and won't get anyone an investment, ever.
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EDIT: Downvotes already, but I don't care, this is right and the article is wrong - and, worse, is wasting your time. It doesn't matter what downvoters think. If anything above were wrong, then I would edit it - I see your voting feedback and I've responded to it by making sure that I am being very precise and correct above. Downvoting won't make it right.
The qualification you listed means reading this article is like asking a fish, how to fish. (Or asking a person what they want in a romantic partner and then doing that.)
Would you take advice on how to fish, from a fish, or a fisherman?
However, this applies to the qualification you listed. Much more impressive is the fact that Garry has closed the Initialized funds (so he's the fishermen, LP's are the fish). For this reason I think that he can do much, much better than the advice given in this article.
That accomplishment (which I read about) is super impressive - it's a $115M fund!
He knows how he closed it, and he knows that it wasn't by following the rules he's just listed for how to catch some fish. He can do better.
I have to stand by my defense of the comment given very swift and definite negative feedback from other people. By mentioning it explicitly, and that I gave it due consideration, I am showing that I am not being a troll or things like that. I could edit it if I felt it was necessary and considered doing so.
More important than mentioning or not mentioning downvotes is the policy of keeping HN a civil place of discussion, and I take a very extreme position, that I feel is justified in this case. I am a bit angry by being mislead in the past regarding how to pitch, and this article repeats many of those highly misleading tips. It's simply misleading. It won't get you an investment. And Garry can do better. (Assuming he is honest.)
I suppose it is possible that he simply is blind to how he is influenced or makes decisions, even when he uses the same things for his own raising activities, also subconsciously.
> Would you take advice on how to fish, from a fish
I think you were joking here, but holy crap yes I would take fishing advice from a fish (provided it was a human-level intelligent fish that spoke english... which if I'm following your metaphor correctly it is in this case)
More generally the issue with "not asking fish how to fish" is it's the exact opposite of how successful companies treat customers. I ask my customers how they liked the product, what they'd change, how they'd sell it to other customers, etc, etc. That isn't an error. It's one of the most effective business improvement tactics I know of.
This is not to say that the information source is unbiased (customers are much less likely to suggest a price hike for example), or particularly skilled at knowing how to address their needs (they'll ask for a "faster horse" when they mean "gasoline engine" to ruin a quote)... but the fact remains that fish (customers or investors) are the best source of information you have.
>I ask my customers how they liked the product, how they'd sell it to other customers, etc, etc
Are you being literal in the second half of your sentence? I, as well as everyone else, has had loads of companies ask me about my opinion as a consumer. I've never had a company ask me "How would you sell this to someone else"? Have you? Do you actually state that question?
The statement "would you ask a fish, how to fish" comes from the dating world. I was tired of not dating despite doing what my women friends told me they wanted, which is wrong. I'll give a personal anecdote. Women looking for serious relationsihps on dating apps will say they will left-swipe or reject someone with just a picture of their nude upper body without a head. That's not what they want to see, they say.
I followed their advice for a while. Then I ignored their advice, I changed my profile picture to a picture of my nude upper body (I'm male) without my head, and shortly thereafter I had a great girlfriend I was in a monogamous relationsihp with, wherein we both deleted our dating accounts shortly after first meeting.
The fact that women say this is not what they want (when asked what they're looking for from 'pitches') is absolutely irrelevant to how to attract and make them happy. This isn't some kind of meta-commentary on consent or anything like that, I am just saying that it doesn't matter that they told me this is not what they want to see. Because it doesn't matter what they say, it matters what htey do.
It doesn't matter what Garry says, it matters what he does, and no, neither he nor anyone else actually invests on the basis of the points he's enumerated in the article. I point this out by showing what it would take to fail any one of these filters.
Also notice how powerful this comment has just become, after I shared a personal story from the dating world. (At least this is my personal judgment/experience - perhaps you don't find it any more convincing than my more rigorous argument upthread.)
> I've never had a company ask me "How would you sell this to someone else"? Have you? Do you actually state that question?
Yes I absolutely ask that question, and have been asked this question. If you hang out around startups, especially ones using Steve Blank's Customer Development Methodology you'll hear it frequently.
> Also notice how powerful this comment has just become, after I shared a personal story from the dating world
I don't know if I agree with powerful. I will say I'm less optimistic about helping you come to a deeper understanding since, well, it sounds like your mind is made up.
The best I can do is: imagine if you, and 7 billion copies of you, were the only people on this planet. Now picture where the above philosophy gets you in terms of global happiness. Perhaps strategies that emphasize communication would do better?
If there were 7 billion copies of me, then the best thing I could do to find out how to sell to them, is to sell to them. Not the best thing would be to ask them. Even more not the best thing would be just to look inside myself.
Garry didn't even relate how pitches he would have said no to got him to say yes - because they 1, used plain-spoken language, or 2, zoomed out, or 3, had a big future, or 4, knew their numbers, or 5, understood something others didn't.
I mean companies he would have said "no" to but these things made him say yes.
Quite simply, these are not the things that make people say yes.
It's a parody, right? But not exactly: many features there were explicitly requested by users.
market research is good and important. Of course I would ask investors what they're interested in, what they think about something, what they would invest in.
But that is not how you get them to invest, and although Garry does know how to get people to invest, he hasn't put it in this article at all.
I suppose the article can be useful if you read it as, "What a YCombinator partner says they want to see from a pitch." Just don't confuse it for the real advise that will get you funded. This isn't it.
> I suppose the article can be useful if you read it as, "What a YCombinator partner says they want to see from a pitch." Just don't confuse it for the real advise that will get you funded. This isn't it.
I was taking Gary's list as "what to focus on if you're interviewing in two days" (ie quite literally "last minute tips" as indicated by his title). Given more time, I agree you should focus on product, team, and traction.
> Garry didn't even relate how pitches he would have said no to got him to say yes - because they 1, used plain-spoken language, or 2, zoomed out, or 3, had a big future, or 4, knew their numbers, or 5, understood something others didn't.
> I mean companies he would have said "no" to but these things made him say yes.
1. Isn't this asking a fish how to fish? :p (Just pointing out we apparently agree; happy to have you on board)
2. I think a fixation on companies that save it in the 9th inning is misplaced. If you're gong to cargo cult from a survivorship biased sample, you may as well pick a group that didn't start off with an error (so imitating "love at first sight" type companies rather than "won me over in the end" type companies).
I saw this a couple days ago too. I took this as indication you need to interpret customer feedback appropriately, not as indication you should avoid customer feedback.
> But that is not how you get them to invest, and although Garry does know how to get people to invest, he hasn't put it in this article at all.
I'm getting the feeling you think getting investment is about a con-men skillset. That hasn't been my experience. A focus on product, team, and traction is almost surely a better use of your time.
good reply but my last-minute tip is "focus on telling a compelling story" (I know I didn't talk much about what tips I would give, but only objected to the tips he did give.)
you are right that where I say he can do better I am asking a fish about fishing - but when he bagged the LP's for his fund (which is a massive and amazing effort) he played the fisherman (I presume.) so I think he's using the wrong role - he's using his role as a fish to talk about how to get fish, rather than using his role as a fisherman, which he also has recent experience with. It would be a more powerful write-up. the Initialized fund is extremely impressive, and it would be interesting to hear how he closed it (assuming that was his role).
YC is the new college degree. This attitude of "figuring our how to past the next test on the path to guaranteed success" is the opposite of entrepreneurial.